National Republican., 1887-05-10
"Cherish Public Credit."-George
Washington,


The greatest OF Virginians gave this advice
to the country Of which he has been SO
truthfully called "the father" and tn which
he dedicated his life. To-day we quote 1t
for the benefit OF the people Of the state of
which George Washington was SO proud to
be citizen. "Cherish public credit"
Yesterday we surrendered large space
and gave prominence to communication
from a gentleman of ripe experience in
financial matters, which proposes"a gradu-
ated interest plan to pay the Virginia state
debt" This plan deserves the serious con-
sideration, not only of the people OF Vir-
gnia, but of the creditors Of the state.
In discussing it, or any other proposal as
to the debt of Virginia, the NATIONAL Re-
PUBLICAN does not propose to consider
party politics or party advantages, but to
treat the question from a higher stand
point, that of what honesty and public
policy require.
Every enterprise, every business interest
in Virginia is affected to greater or less ex-
tent by the standing OF the state. II the
credit of the state is good-if its debts are
provided for-the citizens Of the state, or
others who seek to enlist capital In enter.
prises which will tend to develop its wealth
and resources, find 1t an easy matter to do
go, II the proposed business shows fair
promise of success, but II the states credit
is impaired-if there Is faint upon its honor
as debtor-that taint attaches TO every
business enterprise in It's borders.
Our correspondent, 'Justice," proposed
registered thirty-year bond, with low
rate Of interest, gradually increased, so
that the average for the thirty years is 3per
cent That rate is now accepted in the
money markets Of the world as sufficient If
the security is first class. England, the
United States, France, or Germany can is
sue bonds bearing per cent interest which
would sell at premium, because these ma
tions have paid what they contracted to do.
The creditors of Virginia ought to be
satisfied II they can secure this acreage rate,
particularly II the state takes $25, 5000, ,00O as
suggested by Justice" thus increasing the
debt 100000 over the amount allowed by
the Riddleberger adjustment.
Virginia cannot afford to be anything
but honest and fair in the adjustment Of
her debts. The autonomy of the state was
destroyed by the rape of sixteen millions
Of its territory as war measure, and the
establishment Of the state of West Vir-
ginia, and the state forever rihed Of part Of
its power Of eminent domain and taxation,
thus reducing its debt-paying power.
1t is, then, absolutely fair and honest,
justified both by national and international
law, that q portion OF the debt, CORE.
spending to the amount Of debt.paying
power wrested from 1t, should be set aside
for the United States and the state it
created (West Virginia) tolook after.
The creditors should accept this, and not
look to Virginia for that proportion Of the
debt, whatever it may be, and only seek to
recover the remainder, which is what Vir-
ginia justly owes.
"Justice" assumes that $25, ,000, 900 fully
represents this sum, and exploits his plan
for its payment without an increase OF
taxation to the people Of the state, and
with fair interest to the creditor.
The last assessment OF property In Vir-
ginia made the valuation larger by nearly
$50,00O,OOO than stated by "Justice," and
puts the value Of the real estate for taxa
tien at S262, 1856, 600, and OF personal prop
erty at $s4, ,s44 900, total of $3i7, 500, 900,
which In round numbers and to prevent
the use of fractions, we will call $3.50 000,-
COO. The rate Of state taxation is, as stated
by "Justlce,n 4 mills on the dollar.
This tax rate on this assessed value
would produce $1,400,0O0. The state has
other sources Of revenue Increasing Its In
come to such an extent that, II paid In
cash, the committee appointed by the
legislature now IN session felt justified In
Offering to pay each year SI5O,0O0 as To-
terest and to extinguish the principal.
The plan of "Justcen is to transfer the
heaviest burden Of the payment to the
future, when Virginia will be better able
than now to bear the burden. 1t seams
clear to us that Virglnians should not hest
tate to offer this adjustment TO its creditors,
and equally clear that II would be to the
interest OF the creditors to accept such a
proposal, with the contract inserted In the
bond that the sum specified should be set
aside for the debt.
"Justlce" evidently calculates that for
the first five years the bonds bearing only
per cent. interest can be purchased at u
heavy discount, while for the next five
years, when they bear per cent, the dis
count would still be considerable. We will
endeavor to place his idea before our read
ers in tabulated form, so that they can
more readily be seen, showing the interest
paid and the bonds purchased each year,
and assuming that for the first FIVE years the